When I look at the long-term care (LTC) planning snapshot, 2014 has been quite a year.
In my 18 years as a long-term care insurance (LTCI) specialist, I have never seen more individuals and families having the discussion about this, and making a plan for this potential reality, than I do today!
This year had some bumps in the road for overall national sales, but, as I traveled the country this year, I can attest to meeting a large number of financial professionals whose LTC sales have really grown because conversations with clients have been a major focus.
Some of the trends I heard about related to how financial professionals are thinking about younger and older LTC planning clients.
Clients in younger age groups (ages 40 to 55) are opening up to their financial professionals and are more interested in finding financial solutions to this costly problem. When I gave presentations this year, I found my audiences consisted of people under 55. Just a few years ago, the average age of attendees and interested consumers was well into the 60s. Members of the younger age group are experiencing the burdens that an LTC situation can create in their own families.
Older adults (over 65) are finding it difficult to meet LTCI underwriting requirements. Are you aware that, in many ways, American men, women and children are at the unhealthiest levels in the history of our country? Top financial professionals have had to become “critical thinkers” for these individuals and have had to work to find other solutions for this large segment. Regardless of client age or health issues, each financial professional said to me, “Wendy, everyone deserves to have this conversation, and they deserve to hear about it from me!”
Here are some of the ideas that top pros incorporated into their practices in 2014 to broaden LTC solutions beyond traditional LTCI products used in traditional ways.
1. Life insurance products with LTC rider
This is both a life insurance and long-term care insurance product in one.
The amount of long-term care benefit is often expressed in terms of a percentage of the life benefit. Although these are fairly new in the industry, they really can be quite comprehensive, depending on which insurance company you look at.
There are many clients that have that “lazy money” just sitting in a CD earning very little interest, so financial professionals move that money to pay an initial premium and purchase this combination product.
One other comment: There are many people who are concerned that their investment premiums will not be used if they do not need care. This product does become their financial solution.
See also: NAILBA 33: 5 funding options for LTCI
2. Annuities with a long-term care rider
These may vary significantly, but in general they allow an individual to purchase a fixed deferred annuity with an LTC rider. The annuity may pay out a certain number of years or for life.